FSA bans and fines trader £700,000 for market abuse

The FSA has banned and fined a self employed trader £700,000 for market abuse through manipulation of shares and derivatives.

Barnett Michael Alexander has also been ordered to pay £322,818 in restitution to firms which experienced a loss as a result of his actions.

He has been banned from performing any function in relation to a regulated activity for a minimum of five years.

Alexander manipulated the prices of shares on the London Stock Exchange by entering multiple small orders to buy and sell shares in an effort to manipulate the price of CFDs and spread bets, said the FSA.

He generated £629,130 by trading CFDs and spread bets at prices created through his share price manipulation.

He frequently used CFD and spread betting accounts in the names of third parties to disguise his behaviour.

In the period 1 January 2009 to 25 May 2010 Alexander, an experienced trader and former private client stockbroker, was operating as a self-employed trader dealing in shares and retail derivative products such as contracts for differences (CFDs) and spread bets from his home address.

In May 2010, the FSA obtained a temporary injunction from the High Court preventing Alexander from committing market abuse, and froze £1m of his assets, which the regulator has now made permanent.

"The court action shows the FSA's determination to use all our powers to prevent market abuse and to pursue those who commit it," said the FSA's acting director of enforcement and financial crime Tracey McDermott.

Alexander's ban has been limited to a minimum of five years because the FSA took into account the fact he was a self employed trader, was not working in the financial services industry at the time of the misconduct and fully admitted his market abuse.